Golden rule #1: Money that you invest must be absolutely safe
Residential property in Australia held over the long term is one of the safest investment.
Bank lend up to 90% on residential property because they know that property is very safe for them to lend money.
Golden rule #2: Invest in assets that appreciate in value
Residential property in Australia is one of the only investments where consistent capital growth is generated over time. Over a 10 years period, historically property prices have risen from 5%-10% per annum.
For example … what was your home worth 8 years ago compared to its current value?
Golden rule #3: Insured your assets
Get adequate property insurance; including landlord protection and building insurance.
Also have sufficient personal protection insurances.
Golden rule #4: Use Leverage to achieve highest possible returns on investment
Property always outperforms all other investment classes, because of leverage.
For each dollar you invest, the bank lends you nine dollars. Hence the return on your money is ten dollars. Using leverage provides you with greater return on the money that you actually invest. Invest in the minimum amount as possible to maximise the returns on your money.
Golden rule #5: Maximise tax advantages
Residential property has the most attractive tax advantages compared to any other investment. With negative gearing benefits, you can claim on building and fixtures and fittings, borrowing costs and other costs associated with the investment property including property management fees and insurances.
The combined tax benefits and rental income on a residential investment property can offset all holding costs, and may even provide a positive cash flow. Eliminating all your property expenses.
Golden rule #6: Invest your money in income producing assets
Residential property on average gives a rental return of 4.5-5% per annum and outperform inflation on average of 2.5%.
Golden rule #7: Proven investment system
You must have a proven investment system and that implements all the investment golden rules, requiring minimal involvement.
Following the investment system will avoid headache and potential risks, plus will maximise the upside rewards.